Average per-bit delivery cost

Average Per-Bit Delivery Cost, or APBDC, is one relatively common method by which Internet Service Providers calculate their cost of goods sold.[1]

Concept

Average Per-Bit Delivery Cost averages the cost of however many bits were actually sent or received across a link with the actual cost of operation of the link. This is contrasted principally with flat-rate and 95th percentile functions, which are typically used for billing rather than cost-accounting. In typical use, APBDCs of individual links or components of an operating network are compared with the APBDC of the whole, in order to evaluate the efficiency of the components, and to track improvements in effectiveness.[2]

High APBDC may reflect either a high cost, or a low utilization, either of which is detrimental to the price-performance of the network as a whole, and indicates an area that needs attention and improvement. Besides reduction in costs of existing network components, use of already-amortized or less expensive components, and transmission of greater volumes of traffic, fundamental or "revolutionary" changes to the topology of a network, such as the substitution of peering-derived bandwidth for purchased transit, often have substantial impacts on a network's APBDC.[3]

References

  1. ↑ Average Per-Bit Delivery Costs Archived February 4, 2012, at the Wayback Machine.
  2. ↑ IXPs reduce the portion of an ISP's traffic which must be delivered via their upstream transit providers, thereby reducing the Average Per-Bit Delivery Cost of their service. Archived August 29, 2006, at the Wayback Machine.
  3. ↑ CTU Bulletin on the Proliferation of Internet Exchange Points in the Caribbean
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